Mobile ads a privacy concern for Europe

I'm deputy money editor at City A.M. I focus on personal finance and investing. I'm particularly interested in macroeconomics, pensions and politics. Contact me at william.railton@cityam.com.

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Will Railton

MOBILE advertising in Western Europe is growing sluggishly compared with Asia Pacific (Apac) and North America, according to a recent survey by location-based tech firm xAd.

According to European marketers, their consumers have been rejecting mobile ads primarily on privacy grounds. So why exactly is Europe being turned off?

Some have suggested this is a cultural issue. “Privacy is treated differently in Western Europe compared with the States, because it comprises autonomous countries and cultural attitudes,” says Yves Schwarzbart, senior regulatory affairs manager at the Internet Advertising Bureau (IAB) UK. While the UK probably sits between the US and Western Europe in its stance, he explains, “Germany’s history of state surveillance is still quite fresh, and the lines are blurred between commercial and governmental use of data.”

Such suspicion could cause problems for mobile services which are heavily reliant on ad-funded revenue models. If ad-blockers become more prevalent, services like Facebook will suffer, explains James Bott, M&C Saatchi Mobile’s director of global business development. It is the responsibility of agencies to ensure that the channels they use do not breach privacy laws, says Bott. “We must be tough with our suppliers and technology vendors, quizzing them on where their data comes from and how they protect it. But consumers need to realise that their data is what pays for their services.”

Some experts attribute the slow-down to market maturity in Western Europe. Figures by GfK show that smartphone sales in Western Europe rose by a steady 12 per cent between the first quarter of 2014 and 2015, compared with a 30 per cent spike in emerging Apac countries. “Across the US and Apac, there has been an explosion of ad-tech, fintech and mar-tech, as well as start-ups backed by venture capital, which has accelerated ad growth compared with Western Europe,” says Bott.

But privacy concerns will only grow as location-based mobile advertising, (which sends you messaging from businesses in your vicinity) gathers pace. “The mobile is the most personal device ever,” says Schwarzbart. “Businesses should start the conversation around location-based ads clearly, so the consumer feels comfortable. The IAB is working to ensure an icon is available on mobile services across Europe so location-based adverts can be toggled on or off. Such a facility is already available on the other side of the Atlantic.”